Soaring crude oil prices have boosted profits at anglo-dutch oil firm Royal Dutch Shell.

The company saw earnings jump 38% to $7.09bn (£4.4bn) for the year to 31 December.

This compares with $5.14bn (£3.19bn) for the same period last time.

The rise was helped by the recovery in crude prices, which fell below $10 (£6.20) a barrel last February before rising to an average of $24.15 in the last quarter of the year.

Shell said the average price per barrel for last year had been $17.95 compared with $12.75 for the previous year.

The price of oil rose after oil producing countries agreed to cut production.

Costs cut

Shell also benefited from cutting operating and exploration costs.

The group has cut costs by $2bn and aims to save $4bn a year by 2001.

"We've had another strong performance in the fourth quarter. We've achieved cost improvements well ahead of plan - now standing at $2bn for the year and well on the way towards the new $4bn annual target by 2001," Chairman Mark Moody-Stuart said in a statement.

Of the 102,000 employees working for Shell at the end of 1998, the company forecasts that 18,000 will be off the payroll either through asset disposals or redundancy by the end of 2000.

The figures went down well in the City.

Shell's shares closed 34.5p higher at 451.75p.

"They seem very good numbers. Everything seems to be ticking along very nicely," said Peter Hitchens, oil analyst with brokers Williams de Broe.

Following the results, brokerage Warburg Dillon Read upgraded its rating on Shell in London to "strong buy" from "buy".